Institutional work in making sustainability reporting mandatory in Indonesia through sustainable finance

Putu Agus Ardiana, Ni Nyoman Ayu Diantini, I Made Surya Negara Sudirman, I Putu Gede Sudana, Ni Putu Achintya Wibawa Putri and Kadek Dwi Linda Yanthi

Journal of Accounting in Emerging Economies, 2025, vol. 15, issue 3, 645-669

Abstract: Purpose - This study examines the institutional work that led to mandatory sustainability reporting in Indonesia, focusing on ALPHA’s role in introducing GRI-based standards and influencing regulatory evolution under POJK 51/2017. Design/methodology/approach - A qualitative approach involving 35 semi-structured interviews with corporations, regulators, NGOs, industry associations, consultants and academics was employed. Thematic analysis uncovered key patterns in the institutionalisation process. Findings - ALPHA’s institutional entrepreneurship, boundary work and normative framing spurred early sustainability reporting adoption. Cultural alignment framed reporting as a societal norm, facilitating regulatory acceptance and embedding transparency as a cornerstone of corporate governance under POJK 51/2017. Research limitations/implications - Findings are specific to Indonesia. Future research could explore comparative contexts or investigate how voluntary initiatives evolve into regulatory frameworks in other emerging markets. Practical implications - Policymakers can enhance regulatory frameworks by aligning them with cultural values, while corporations may view sustainability practices as strategic assets for legitimacy and reputation. Social implications - Aligning sustainability reporting with cultural values fosters corporate transparency and builds public trust. Originality/value - This study contributes to the institutional work framework by demonstrating how cultural alignment and agency facilitate the institutionalisation of sustainability reporting in an emerging market.

Keywords: Institutional work; Institutional entrepreneurship; Mandatory sustainability reporting; POJK 51/2017; Sustainable finance; Cultural values (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jaeepp:jaee-02-2024-0088

DOI: 10.1108/JAEE-02-2024-0088

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